Dischargeable Debts Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Dischargeable Debts, written in plain English, along with examples of how it is used.

What is Dischargeable Debts?

“The debts which are erasable by the bankruptcy process. Most debts which are incurred prior to bankruptcy, such as credit card bills, back rent and medical bills qualify for discharge.

History and Meaning of Dischargeable Debts

Dischargeable debts are debts that can be eliminated through a bankruptcy process. Most debts that were incurred before filing for bankruptcy, such as medical bills, credit card debt, and unpaid rent, are eligible for discharge.

Chapter 7 bankruptcy, also called liquidation bankruptcy, is the most common type of bankruptcy where the debtor's non-exempt assets are sold to pay off creditors, and any remaining dischargeable debts are canceled. In contrast, Chapter 13 bankruptcy involves creating a payment plan designed to pay off all, or a portion of the debtor's dischargeable debts over time.

It is important to note that some types of debts, such as student loans or taxes, may not be dischargeable under certain circumstances. Additionally, if a creditor can prove that the debtor incurred the debt through fraud, the court may rule that the debt is non-dischargeable.

Examples of Dischargeable Debts

  1. Credit card debt
  2. Medical bills
  3. Unpaid rent
  4. Personal loans
  5. Utility bills

Legal Terms Similar to Dischargeable Debts

  1. Non-dischargeable debts - debts that cannot be eliminated through bankruptcy.
  2. Chapter 7 bankruptcy - a type of bankruptcy that includes liquidation of assets to eliminate dischargeable debts.
  3. Chapter 13 bankruptcy - a type of bankruptcy that allows the debtor to create a payment plan to pay off all or a portion of their dischargeable debts over time.